SOURCE: Central Valley Community Bancorp

January 31, 2013 16:15 ET

Central Valley Community Bancorp Reports Earnings Results for the Year Ended December 31, 2012

FRESNO, CA--(Marketwire - Jan 31, 2013) -  The Board of Directors of Central Valley Community Bancorp (Company) (NASDAQ: CVCY), the parent company of Central Valley Community Bank (Bank), reported today unaudited consolidated net income of $7,520,000, and diluted earnings per common share of $0.75 for the year ended December 31, 2012, compared to $6,477,000 and $0.63 per diluted common share for the year ended December 31, 2011. Net income increased 16.10%, primarily driven by increases in non-interest income, a decrease in non-interest expense and lower provision for credit losses, partially offset by a decrease in net interest income in 2012 compared to 2011. Non-performing assets decreased $4,739,000 or 32.83% to $9,695,000 at December 31, 2012, compared to $14,434,000 at December 31, 2011. The Company had no OREO as of December 31, 2012 or December 31, 2011. During 2012, the Company's shareholders' equity increased $10,183,000, or 9.47%. The growth in shareholders' equity was driven by net income during the period, an increase in other comprehensive income, and the issuance of common stock from the exercise of stock options. Unaudited consolidated net income for the year was the highest in the Company's 32 years of operation.

During the year ended 2012, the Company's total assets increased 4.85%, total liabilities increased 4.18%, and shareholders' equity increased 9.47% compared to December 31, 2011. Return on average equity (ROE) for the year ended December 31, 2012 was 6.56%, compared to 6.26% for the year ended December 31, 2011. The increase in ROE reflects an increase in net income, notwithstanding an increase in capital from an increase in other comprehensive income and an increase in retained earnings. Return on average assets (ROA) was 0.88% and 0.81% for the years ended December 31, 2012 and 2011, respectively. The increase in ROA is due to an increase in net income, notwithstanding an increase in average assets.

During the year ended December 31, 2012, the Company recorded a provision for credit losses of $700,000, compared to $1,050,000 for the year ended December 31, 2011. During the year ended December 31, 2012, the Company recorded $1,963,000 in net loan charge-offs, compared to $668,000 for the year ended December 31, 2011. The net charge-off ratio, which reflects net charge-offs to average loans, was 0.48% for the year ended December 31, 2012, compared to 0.16% for the same period in 2011. The charged off loans were previously identified and adequately reserved for as of December 31, 2011. The Company also recorded OREO related expenses of $78,000 during 2012 compared to $15,000 for the year ended December 31, 2011.

At December 31, 2012, the allowance for credit losses stood at $10,133,000, compared to $11,396,000 at December 31, 2011, a net decrease of $1,263,000. The allowance for credit losses as a percentage of total loans was 2.56% at December 31, 2012, and 2.67% at December 31, 2011. The Company believes the allowance for credit losses is adequate to provide for probable incurred losses inherent within the loan portfolio at December 31, 2012.

Total non-performing assets were $9,695,000, or 1.09% of total assets as of December 31, 2012 compared to $14,434,000 or 1.70% of total assets as of December 31, 2011. Total non-performing assets as of September 30, 2012 were $10,190,000 or 1.15% of total assets. 

The following provides a reconciliation of the change in non-accrual loans for 2012.

                                   
(Dollars in thousands)   Balances December 31, 2011   Additions to Non-accrual Loans   Net Pay Downs     Transfer to Foreclosed Collateral - OREO     Returns to Accrual Status   Charge Offs     Balances December 31, 2012
Non-accrual loans:                                                
  Commercial and industrial   $ 267   $ 4   $ (32 )   $ (155 )   $ --   $ (84 )   $ --
  Real estate     2,787     294     (312 )     (2,175 )     --     (381 )     213
  Equity loans and lines of credit     705     79     (472 )     --       --     (75 )     237
  Consumer     74     73     (4 )     --       --     (143 )     --
Restructured loans (non-accruing):                                                
  Real estate     2,129     425     (82 )     (7 )     --     (1,103 )     1,362
  Real estate construction and land development     6,823     --     (535 )     --       --     --       6,288
  Equity loans and lines of credit     1,649     75     (129 )     --       --     --       1,595
    Total non-accrual   $ 14,434   $ 950   $ (1,566 )   $ (2,337 )   $ --   $ (1,786 )   $ 9,695
                                                 

The following provides a summary of the change in the OREO balance for the year ended December 31, 2012:

         
  (Dollars in thousands)   Year Ended December 31, 2012  
  Balance, Beginning of period   $ --  
  Additions     2,337  
  Dispositions     (2,349 )
  Write-downs     --  
  Net gain on disposition     12  
  Balance, End of period   $ --  
           

The Company's net interest margin (fully tax equivalent basis) was 4.21% for the year ended December 31, 2012, compared to 4.63% for the year ended December 31, 2011. The decrease in net interest margin in the period-to-period comparison resulted primarily from a decrease in the yield on the Company's investment portfolio partially offset by a decrease in the Company's cost of funds. For the year ended December 31, 2012, the effective yield on total earning assets decreased 58 basis points to 4.46% compared to 5.04% for the year ended December 31, 2011, while the cost of total interest-bearing liabilities decreased 21 basis points to 0.37% compared to 0.58% for the year ended December 31, 2011. The cost of total deposits decreased 16 basis points to 0.23% for the year ended December 31, 2012, compared to 0.39% for the year ended December 31, 2011. For the year ended December 31, 2012, the amount of the Company's average investment securities, including interest-earning deposits in other banks and Federal funds sold, increased $68,883,000 or 22.97% compared to the year ended December 31, 2011. The effective yield on average investment securities decreased to 2.77% for the year ended December 31, 2012, compared to 3.33% for the year ended December 31, 2011. The decrease in yield in the Company's investment securities during 2012 resulted primarily from the purchase of lower yielding investment securities. Total average loans, which generally yield higher rates than investment securities, decreased $23,251,000, from $428,291,000 for the year ended December 31, 2011 to $405,040,000 for the year ended December 31, 2012. The effective yield on average loans decreased to 6.06% for the year ended December 31, 2012, compared to 6.32% for the year ended December 31, 2011. Net interest income before the provision for credit losses for the year ended December 31, 2012 was $29,937,000, compared to $31,357,000 for the year ended December 31, 2011, a decrease of $1,420,000 or 4.53%. Net interest income decreased as a result of these yield changes and an increase in interest-bearing liabilities, partially offset by an increase in average earning assets.

Total average assets for the year ended December 31, 2012 were $853,078,000 compared to $800,178,000, for the year ended December 31, 2011, an increase of $52,900,000 or 6.61%. Total average loans were $405,040,000 for the year ended 2012, compared to $428,291,000 for the same period in 2011, representing a decrease of $23,251,000 or 5.43%. Total average investments, including deposits in other banks and Federal funds sold, increased to $368,818,000 for the year ended December 31, 2012, from $299,935,000 for the year ended December 31, 2011, representing an increase of $68,883,000 or 22.97%. Total average deposits increased $41,812,000 or 6.17% to $719,601,000 for the year ended December 31, 2012, compared to $677,789,000 for the year ended December 31, 2011. Average interest-bearing deposits increased $6,527,000, or 1.32%, and average non-interest bearing demand deposits increased $35,285,000, or 19.36%, for the year ended December 31, 2012, compared to the year ended December 31, 2011. The Company's ratio of average non-interest bearing deposits to total deposits was 30.23% for the year ended December 31, 2012, compared to 26.89% for the year ended December 31, 2011. 

Non-interest income for the year ended December 31, 2012 increased $971,000 to $7,242,000, compared to $6,271,000 for the year ended December 31, 2011, driven primarily by an increase of $1,341,000 in net realized gains on sales and calls of investment securities, and a $357,000 increase in loan placement fees, partially offset by a decrease of $603,000 in gains on the sale of other real estate owned, and a $129,000 decrease in service charge income. The net gain realized on sales and calls of investment securities was the result of a partial restructuring of the investment portfolio designed to improve the future performance of the portfolio.

Non-interest expense for the year ended December 31, 2012 decreased $966,000, or 3.42%, to $27,274,000 compared to $28,240,000 for the year ended December 31, 2011, primarily due to decreases in occupancy and equipment expenses of $217,000, advertising fees of $177,000, amortization of core deposit intangibles of $214,000, legal fees of $150,000, salaries and employee benefits of $165,000, and regulatory assessments of $193,000, partially offset by increases in other real estate owned expenses of $63,000 and merger-related expenses of $284,000.

The Company recorded an income tax expense of $1,685,000 for the year ended December 31, 2012, compared to $1,861,000 for the year ended December 31, 2011. The effective tax rate for 2012 was 18.31% compared to 22.32% for the year ended December 31, 2011.

In December 2012, the Company entered into a definitive merger agreement to acquire Visalia Community Bank and is in the process of filing the required regulatory applications with federal and state banking regulators and a securities registration statement with the Securities and Exchange Commission. The Company anticipates it will receive regulatory approvals and expects to complete the merger near the end of the second quarter of 2013. During the year ended December 31, 2012, the company recorded $284,000 in merger-related expenses as a part of non-interest expense.

Quarter Ended December 31, 2012
For the quarter ended December 31, 2012, the Company reported unaudited consolidated net income of $1,642,000 and diluted earnings per common share of $0.16, compared to $1,708,000 and $0.17 per diluted share, for the same period in 2011. The decrease in net income during the fourth quarter of 2012 compared to the same period in 2011 is primarily due to decreases in net interest income and an increase in non-interest expense, partially offset by an increase in non-interest income.

Annualized return on average equity for the fourth quarter of 2012 was 5.56%, compared to 6.41% for the same period of 2011. This decrease is reflective of a decrease in net income and an increase in capital. Annualized return on average assets was 0.74% for the fourth quarter of 2012 compared to 0.81% for the same period in 2011. This decrease is due to a decrease in net income and an increase in average assets.

In comparing the fourth quarter of 2012 to the fourth quarter of 2011, average total loans decreased $25,735,000, or 6.15%. During the fourth quarter of 2012, the Company recorded $200,000 in provision for credit losses, compared to $300,000 for the same period in 2011. During the fourth quarter of 2012, the Company recorded $281,000 in net loan charge-offs compared to $66,000 in net loan recoveries for the same period in 2011. The net charge-off ratio, which reflects annualized net charge-offs (recoveries) to average loans, was 0.29% for the quarter ended December 31, 2012 compared to (0.06)% for the quarter ended December 31, 2011.

The following provides a reconciliation of the change in non-accrual loans for the quarter ended December 31, 2012.

                               
(Dollars in thousands)   Balances September 30, 2012   Additions to Non-accrual Loans   Net Pay Downs     Transfer to Foreclosed Collateral - OREO   Returns to Accrual Status   Charge Offs   Balances December 31, 2012
Non-accrual loans:                                            
  Real estate   $ 510   $ --   $ (297 )   $ --   $ --   $ --   $ 213
  Equity loans and lines of credit     239     --     (2 )     --     --     --     237
Restructured loans (non-accruing):                                            
Real estate     1,386     --     (24 )     --     --     --     1,362
  Real estate construction and land development     6,428     --     (140 )     --     --     --     6,288
  Equity loans and lines of credit     1,627     --     (32 )     --     --     --     1,595
    Total non-accrual   $ 10,190   $ --   $ (495 )   $ --   $ --   $ --   $ 9,695
                                             

The Company had no OREO transactions recorded during the quarter ended December 31, 2012.

Average total deposits for the fourth quarter of 2012 increased $28,846,000 or 4.03% to $744,072,000 compared to $715,226,000 for the same period of 2011. 

The Company's net interest margin (fully tax equivalent basis) decreased 55 basis points to 3.95% for the quarter ended December 31, 2012, from 4.50% for the quarter ended December 31, 2011. Net interest income, before provision for credit losses, decreased $827,000 or 10.32% to $7,189,000 for the fourth quarter of 2012, compared to $8,016,000 for the same period in 2011. The decreases in net interest margin and in net interest income are primarily due to a decrease in the yield on interest-earning assets and a decrease in average loan balances. Over the same periods, the cost of total deposits decreased 15 basis points to 0.17% compared to 0.32% in 2011.

Non-interest income increased $498,000 or 37.42% to $1,829,000 for the fourth quarter of 2012 compared to $1,331,000 for the same period in 2011. The fourth quarter of 2012 non-interest income included $352,000 in net realized gains on sales and calls of investment securities compared to $49,000 for the same period in 2011. Loan placement fees increased $134,000 during the fourth quarter of 2012, compared to the same period in 2011. Non-interest expense increased $185,000 or 2.72% for the same periods mainly due to increases in salaries and employee benefits of $110,000 and merger-related expenses of $284,000, partially offset by decreases in amortization of core deposit intangible expense, advertising expense, data processing expense and occupancy expense.

"The Company achieved its highest earnings mark in 32 years of operation for the full 2012 year. The fourth quarter of 2012 showed consistent earnings due to an increase in non-interest income from securities called/sold and from loan placement fees. This along with continued asset quality improvement highlights the safety and financial strength of our company," stated Daniel J. Doyle, President and CEO of Central Valley Community Bancorp and Central Valley Community Bank.

"Gross loans decreased during the quarter as a result of customer paydowns. The market for loans continues to experience competitive pricing and terms. We are seeing some increase in loan commitments, but reduced usage on lines of credit due to economic uncertainty has impacted our business borrowers and the profitability of many of our agriculture-related borrowers."

"During the fourth quarter, we announced the pending merger with Visalia Community Bank which has four full-service offices in Visalia and one branch in Exeter. We believe adding these offices, their professional employees and customers to our current structure will provide a long-term benefit to the growth and profitability of our company. The transaction, which is expected to close in the second quarter of 2013, is subject to customary closing conditions, including regulatory approvals and approval by Visalia Community Bank's shareholders," concluded Doyle.

Central Valley Community Bancorp trades on the NASDAQ stock exchange under the symbol CVCY. Central Valley Community Bank, headquartered in Fresno, California, was founded in 1979 and is the sole subsidiary of Central Valley Community Bancorp. Central Valley Community Bank currently operates 17 full service offices in Clovis, Fresno, Kerman, Lodi, Madera, Merced, Modesto, Oakhurst, Prather, Sacramento, Stockton, and Tracy, California. In December 2012, Central Valley Community Bancorp entered into a definitive merger agreement to acquire Visalia Community Bank with four offices in Visalia and one in Exeter, which is expected to be completed during 2013. Additionally, the Bank operates Commercial Real Estate Lending, SBA Lending and Agribusiness Lending Departments. Investment services are provided by Investment Centers of America and insurance services are offered through Central Valley Community Insurance Services LLC. 

Members of Central Valley Community Bancorp's and the Bank's Board of Directors are: Daniel N. Cunningham (Chairman), Sidney B. Cox, Edwin S. Darden, Jr., Daniel J. Doyle, Steven D. McDonald, Louis McMurray, William S. Smittcamp, Joseph B. Weirick, and Wanda L. Rogers (Director Emeritus).

More information about Central Valley Community Bancorp and Central Valley Community Bank can be found at www.cvcb.com. Also, visit Central Valley Community Bank on Twitter and Facebook.

Forward-looking Statements -- Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained herein that are not historical facts, such as statements regarding the Company's current business strategy and the Company's plans for future development and operations, are based upon current expectations. These statements are forward-looking in nature and involve a number of risks and uncertainties. Such risks and uncertainties include, but are not limited to (1) significant increases in competitive pressure in the banking industry; (2) the impact of changes in interest rates, a decline in economic conditions at the international, national or local level on the Company's results of operations, the Company's ability to continue its internal growth at historical rates, the Company's ability to maintain its net interest margin, and the quality of the Company's earning assets; (3) changes in the regulatory environment; (4) fluctuations in the real estate market; (5) changes in business conditions and inflation; (6) changes in securities markets; and (7) the other risks set forth in the Company's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2011. Therefore, the information set forth in such forward-looking statements should be carefully considered when evaluating the business prospects of the Company.

 
 
CENTRAL VALLEY COMMUNITY BANCORP
CONSOLIDATED BALANCE SHEETS
 
    December 31,   December 31,
(In thousands, except share amounts)   2012   2011
    (Unaudited)    
ASSETS            
Cash and due from banks   $ 22,405   $ 19,409
Interest-earning deposits in other banks     30,123     24,467
Federal funds sold     428     928
    Total cash and cash equivalents     52,956     44,804
Available-for-sale investment securities (Amortized cost of $381,074 at December 31, 2012 and $321,405 at December 31, 2011)     393,965     328,413
Loans, less allowance for credit losses of $10,133 at December 31, 2012 and $11,396 at December 31, 2011     385,185     415,999
Bank premises and equipment, net     6,252     5,872
Bank owned life insurance     12,163     11,655
Federal Home Loan Bank stock     3,850     2,893
Goodwill     23,577     23,577
Core deposit intangibles     583     783
Accrued interest receivable and other assets     11,697     15,027
      Total assets   $ 890,228   $ 849,023
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Deposits:            
  Non-interest bearing   $ 240,169   $ 208,025
  Interest bearing     511,263     504,961
    Total deposits     751,432     712,986
Short-term borrowings     4,000     --
Long-term debt     --     4,000
Junior subordinated deferrable interest debentures     5,155     5,155
Accrued interest payable and other liabilities     11,976     19,400
      Total liabilities     772,563     741,541
Commitments and contingencies            
Shareholders' equity:            
Preferred stock, no par value, $1,000 per share liquidation preference; 10,000,000 shares authorized, Series C, issued and outstanding: 7,000 shares at December 31, 2012 and December 31, 2011     7,000     7,000
Common stock, no par value; 80,000,000 shares authorized; issued and outstanding: 9,558,746 at December 31, 2012 and 9,547,816 at December 31, 2011     40,583     40,552
Retained earnings     62,496     55,806
Accumulated other comprehensive income, net of tax     7,586     4,124
      Total shareholders' equity     117,665     107,482
      Total liabilities and shareholders' equity   $ 890,228   $ 849,023
                   
                   
                   
CENTRAL VALLEY COMMUNITY BANCORP  
CONSOLIDATED STATEMENTS OF INCOME  
   
    For the Three Months
Ended December 31
    For the Twelve Months Ended December 31,  
(In thousands, except share and per share amounts)   2012   2011     2012   2011  
    (Unaudited)   (Unaudited)     (Unaudited)      
INTEREST INCOME:                            
  Interest and fees on loans   $ 5,665   $ 6,436     $ 23,913   $ 26,098  
  Interest on deposits in other banks     38     46       108     187  
  Interest on Federal funds sold     1     1       2     2  
  Interest and dividends on investment securities:                            
    Taxable     595     1,241       3,289     4,548  
    Exempt from Federal income taxes     1,275     942       4,508     3,464  
      Total interest income     7,574     8,666       31,820     34,299  
INTEREST EXPENSE:                            
  Interest on deposits     323     586       1,630     2,662  
  Interest on junior subordinated deferrable interest debentures     25     27       107     100  
  Other     37     37       146     180  
    Total interest expense     385     650       1,883     2,942  
    Net interest income before provision for credit losses     7,189     8,016       29,937     31,357  
PROVISION FOR CREDIT LOSSES     200     300       700     1,050  
    Net interest income after provision for credit losses     6,989     7,716       29,237     30,307  
NON-INTEREST INCOME:                            
  Service charges     719     720       2,774     2,903  
  Appreciation in cash surrender value of bank owned life insurance     100     93       391     382  
  Loan placement fees     223     89       631     274  
  Net gain on disposal of other real estate owned     --     7       12     615  
  Net realized (loss) gain on sale of assets     --     (5 )     4     (5 )
  Net realized gains on sales and calls of investment securities     352     49       1,639     298  
  Other-than-temporary impairment loss:                            
    Total impairment loss     --     --       --     (31 )
    Loss recognized in other comprehensive income     --     --       --     --  
      Net impairment loss recognized in earnings     --     --       --     (31 )
  Federal Home Loan Bank dividends     25     2       36     9  
  Other income     410     376       1,755     1,826  
    Total non-interest income     1,829     1,331       7,242     6,271  
NON-INTEREST EXPENSES:                            
  Salaries and employee benefits     3,738     3,628       15,597     15,762  
  Occupancy and equipment     914     947       3,578     3,795  
  Regulatory assessments     164     181       652     845  
  Data processing expense     274     321       1,125     1,178  
  Advertising     139     187       558     735  
  Audit and accounting fees     135     154       514     491  
  Legal fees     67     69       185     335  
  Merger expenses     284     --       284     --  
  Other real estate owned     --     4       78     15  
  Amortization of core deposit intangibles     50     103       200     414  
  Other expense     1,218     1,204       4,503     4,670  
    Total non-interest expenses     6,983     6,798       27,274     28,240  
      Income before provision for income taxes     1,835     2,249       9,205     8,338  
PROVISION FOR INCOME TAXES     193     541       1,685     1,861  
    Net income   $ 1,642   $ 1,708     $ 7,520   $ 6,477  
Net income   $ 1,642   $ 1,708     $ 7,520   $ 6,477  
Preferred stock dividends and accretion     88     86       350     486  
    Net income available to common shareholders   $ 1,554   $ 1,622     $ 7,170   $ 5,991  
Net income per common share:                            
  Basic earnings per common share   $ 0.16   $ 0.17     $ 0.75   $ 0.63  
  Weighted average common shares used in basic computation     9,586,201     9,547,816       9,587,784     9,522,066  
  Diluted earnings per common share   $ 0.16   $ 0.17     $ 0.75   $ 0.63  
  Weighted average common shares used in diluted computation     9,629,300     9,552,043       9,616,413     9,538,662  
Cash dividends per common share   $ 0.05   $ --     $ 0.05     --  
                             
                             
                             
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
For the three months ended    Dec. 31,   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,
    2012   2012   2012   2012   2011
(In thousands, except share and per share amounts)                              
Net interest income   $ 7,189   $ 7,572   $ 7,510   $ 7,666   $ 8,016
Provision for credit losses     200     --     100     400     300
Net interest income after provision for credit losses     6,989     7,572     7,410     7,266     7,716
Total non-interest income     1,829     2,284     1,471     1,658     1,331
Total non-interest expense     6,983     6,655     6,718     6,918     6,798
Provision for income taxes     193     745     454     293     541
Net income   $ 1,642   $ 2,456   $ 1,709   $ 1,713   $ 1,708
Net income available to common shareholders   $ 1,554   $ 2,369   $ 1,622   $ 1,625   $ 1,622
Basic earnings per common share   $ 0.16   $ 0.25   $ 0.17   $ 0.17   $ 0.17
Weighted average common shares used in basic computation     9,586,201     9,602,473     9,592,045     9,570,297     9,547,816
Diluted earnings per common share   $ 0.16   $ 0.25   $ 0.17   $ 0.17   $ 0.17
Weighted average common shares used in diluted computation     9,629,300     9,635,339     9,618,976     9,577,432     9,552,043
                               
                               
                               
CENTRAL VALLEY COMMUNITY BANCORP  
SELECTED RATIOS  
(Unaudited)  
   
As of and for the three months ended   Dec. 31     Sep. 30     Jun. 30,     Mar. 31,     Dec. 31,  
    2012     2012     2012     2012     2011  
(Dollars in thousands, except per share amounts)                                        
Allowance for credit losses to total loans     2.56 %     2.56 %     2.45 %     2.52 %     2.67 %
Nonperforming assets to total assets     1.09 %     1.15 %     1.48 %     1.48 %     1.70 %
Total nonperforming assets   $ 9,695     $ 10,190     $ 12,340     $ 12,395     $ 14,434  
Net loan charge offs (recoveries)   $ 281     $ (74 )   $ 245     $ 1,511     $ (66 )
Net charge offs (recoveries) to average loans (annualized)     0.29 %     (0.07 )%     0.24 %     1.46 %     (0.06 )%
Book value per share   $ 11.58     $ 11.5     $ 11.08     $ 10.82     $ 10.52  
Tangible book value per share   $ 9.05     $ 8.98     $ 8.55     $ 8.28     $ 7.97  
Tangible common equity   $ 86,505     $ 86,276     $ 81,999     $ 79,422     $ 76,122  
Interest and dividends on investment securities exempt from Federal income taxes   $ 1,275     $ 1,118     $ 1,078     $ 1,037     $ 942  
Net interest margin (calculated on a fully tax equivalent basis) (1)     3.95 %     4.21 %     4.33 %     4.37 %     4.50 %
Return on average assets (2)     0.74 %     1.14 %     0.82 %     0.82 %     0.81 %
Return on average equity (2)     5.56 %     8.43 %     6.06 %     6.19 %     6.41 %
Tier 1 leverage - Bancorp     10.56 %     10.78 %     10.70 %     10.33 %     10.13 %
Tier 1 leverage - Bank     10.22 %     10.35 %     10.60 %     10.21 %     10.01 %
Tier 1 risk-based capital - Bancorp     18.24 %     18.27 %     17.29 %     16.97 %     16.20 %
Tier 1 risk-based capital - Bank     17.67 %     17.56 %     17.14 %     16.78 %     16.02 %
Total risk-based capital - Bancorp     19.53 %     19.57 %     18.58 %     18.25 %     17.49 %
Total risk based capital - Bank     18.96 %     18.86 %     18.43 %     18.06 %     17.31 %
                                         
(1) Net Interest Margin is computed by dividing annualized quarterly net interest income by quarterly average interest-bearing assets.
   
(2) Computed by annualizing quarterly net income.
   
   
   
CENTRAL VALLEY COMMUNITY BANCORP  
AVERAGE BALANCES AND RATES  
(Unaudited)  
   
AVERAGE AMOUNTS   For the Three Months
Ended December 31
    For the Twelve Months Ended December 31,  
(Dollars in thousands)   2012     2011     2012     2011  
Federal funds sold   $ 748     $ 847     $ 618     $ 695  
Interest-bearing deposits in other banks     41,334       72,624       36,836       73,016  
Investments     368,587       275,035       331,364       226,224  
Loans (1)     383,051       404,034       394,575       412,969  
Federal Home Loan Bank stock     3,850       2,893       3,544       2,958  
Earning assets     797,570       755,433       766,937       715,862  
Allowance for credit losses     (10,090 )     (11,087 )     (10,365 )     (11,018 )
Non-accrual loans     9,967       14,719       10,465       15,322  
Other real estate owned     --       70       919       217  
Other non-earning assets     87,214       81,952       85,122       79,795  
Total assets   $ 884,661     $ 841,087     $ 853,078     $ 800,178  
                                 
Interest bearing deposits   $ 506,586     $ 514,350     $ 502,072     $ 495,545  
Other borrowings     9,155       9,155       9,156       10,265  
Total interest-bearing liabilities     515,741       523,505       511,228       505,810  
Non-interest bearing demand deposits     237,486       200,876       217,529       182,244  
Non-interest bearing liabilities     13,263       10,128       9,760       8,738  
Total liabilities     766,490       734,509       738,517       696,792  
Total equity     118,171       106,578       114,561       103,386  
Total liabilities and equity   $ 884,661     $ 841,087     $ 853,078     $ 800,178  
                                 
AVERAGE RATES                                
Federal funds sold     0.30 %     0.25 %     0.30 %     0.29 %
Interest-earning deposits in other banks     0.37 %     0.25 %     0.29 %     0.26 %
Investments     2.74 %     3.88 %     3.05 %     4.33 %
Loans     5.87 %     6.32 %     6.06 %     6.32 %
Earning assets     4.14 %     4.85 %     4.46 %     5.04 %
Interest-bearing deposits     0.25 %     0.45 %     0.32 %     0.54 %
Other borrowings     2.69 %     2.77 %     2.76 %     2.73 %
Total interest-bearing liabilities     0.30 %     0.49 %     0.37 %     0.58 %
Net interest margin (calculated on a fully tax equivalent basis) (2)     3.95 %     4.50 %     4.21 %     4.63 %
                                 
(1) Average loans do not include non-accrual loans.
   
(2) Calculated on a fully tax equivalent basis, which includes Federal tax benefits relating to income earned on municipal bonds totaling $657 and $485 for the quarters ended December 31, 2012 and 2011, respectively. The Federal tax benefits relating to income earned on municipal bonds totaled $2,322 and $1,784 for the year ended December 31, 2012 and 2011, respectively.